Silicon Valley billionaire Peter Thiel finds himself in a bewildering moral dilemma as he tries to weigh the merits of his nerd belief in cryptocurrency against his patriotic paranoia centered on China’s economic rivalry with the United States. Thiel took part in a “virtual event for members of the Richard Nixon Foundation” and affirmed his position as a “Pro-Bitcoin maximalist”. However, he felt compelled to cast doubt on his belief as he feared that China could use Bitcoin as a challenge to US financial supremacy.
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According to Yahoo’s Tim O’Donnell, Thiel believes Beijing may see Bitcoin as a tool that could undo the power of the dollar. He quotes Thiel directly, who wonders whether “Bitcoin should also be thought [of] partly as a Chinese financial weapon against the USA “
Today’s definition of the Daily Devil’s Dictionary:
The role of a significant amount of money in the hands of a person, company, or nation is expected to play a role in maintaining power and obtaining undue advantage in today’s competitive capitalism
Thiel could say the obvious. Money is power and concentrations of money are concentrated power. The point of power is to influence, intimidate, or conquer, depending on how focused the power may be. Ironically, it is appropriate that the event Thiel spoke at was organized by the Nixon Foundation. Richard Nixon was known for putting the pursuit of power above any other consideration. He was also known for opening the relationship with China that many Republicans today believe led to a pattern of behavior that allowed China to emerge as far more threatening than the Soviet Union during the Cold War. Nixon was also the president who destroyed the Bretton Woods system that set the financial rules for stable international relations after World War II.
Thiel’s thoughts are both transparently imperialistic. They follow Donald Trump’s “America First” logic and at the same time reveal Thiel’s uncertainty about how they should be designed in the context of Bitcoin. His version of America First has less to do with the Trumpian idea that America should deal with its own internal affairs first and deal with the world later than with the neocon idea that the US should be more unique Hegemon have to enforce the world economy. In Thiel’s eyes, this is uncomfortable next to his belief in Silicon Valley that cryptocurrencies represent the trend towards something that could be called “financial democracy”.
According to O’Donnell, Thiel stated that China doesn’t like the fact that the US dollar is the world’s primary reserve currency because it provides US global economic “leverage” and he believes Beijing is using Bitcoin as an instrument could consider that making this possible could lose the power of the dollar. “O’Donnell is guilty of a somewhat hypocritical understatement when he claims that the point is that China doesn’t“ like ”the dollar’s status as the world’s most important reserve currency. Who but the US would “like” something like this? These are O’Donnell’s words, not Thiel’s. As for the idea that Bitcoin could undo the power of the dollar, Thiel avoids clarifying this specific point and prefers a vaguely paranoid reading of events as he suggests some sort of conspiracy in which China could use Bitcoin to address the issue Undermine US hegemony.
Thiel’s formulation clearly puts him in the realm of so-called diplomatic paranoia. He begins with a statement of speculative uncertainty expressing concern that China is making Bitcoin a financial weapon. Here is his exact words: “I wonder if Bitcoin should be thought of as a Chinese financial weapon against the USA, where it threatens fiat money, but in particular threatens the US dollar and China wants to do things to weaken it it.”
“I wonder if Bitcoin should also be considered at this point,” expresses a sly suggestion of bad intentions by a Fu Manchu version of the Chinese government. This is now a popular trump card among Republicans and even Democrats vying to call China an enemy rather than a rival. But Thiel’s admission that it really is about wondering shows us that we are closer to Alice’s Wonderland than the CIA fact book.
Thiel then adds the temporal detail “at this point”, which introduces a surreal concept of time that has more to do with a fictional dramatic structure than with the reality of contemporary history. It is tantamount to saying: This is where the plot thickens. And his suggestion of how to think about it shows that we are not only manipulative, but also being asked to accept the action of a paranoid fantasy made up of thoughts rather than reality.
He then explains what he means by “a Chinese financial weapon against the US”. Although he claims to believe in the absolute freedom of cryptocurrency, he accuses it of violating what could be called the “rule of law” in that it “threatens fiat money,” the privilege of every nation on earth is. But this concern is of little value compared to the fact that it “particularly threatens the US dollar,” which China, as it goes without saying, seeks to weaken.
Thiel knows where the money is. It is in the primacy of the US dollar. That’s why the US has 800 military bases around the world.
Since US President Richard Nixon dismantled the Bretton Woods system in 1971, on whose behalf the Richard Nixon Foundation was established, the dollar has served as the ultimate and most devastating financial weapon in history, used by a single government. The Bretton Woods Agreement, signed by 44 countries in 1944, enabled the dollar to play a controlled role as the world’s reserve currency thanks to its convertibility with gold. When the growing instability of the dollar, partly due to the Vietnam War, threatened the order established by Bretton Woods, Nixon unilaterally broke ties with gold. Immediately the United States was free to arm the dollar for whatever purpose it deemed in their interests.
Nixon produced one of the greatest faits accomplis in history. As with many successful undetected revolutions, the Nixon administration presented the decoupling of the dollar and gold as a temporary measure in response to a current crisis. It was two years before the world realized that Bretton Woods had definitely collapsed. The era of floating currencies began. Money could finally be seen for what it is: a shared imaginary store of value that could eventually move into the center of what Yuval Noah Harari called the religion of capitalism in his book “Money”.
For many people, Bitcoin has become a kind of alternative religion, or rather a vociferous radical sect on the fringes of the global religion of neoliberal capitalism. Bitcoin as a concept underscores the lesson from the collapse of Bretton Woods: Despite Milton Friedman’s objections, the value of the currency exchange is literally based on nothing and is therefore meaningless. This also means – although the believers are unwilling to admit it – that its value can be manipulated infinitely. It seems to come from economic reality, but it is little more entrenched than what a small group of people with excess money think of it on a given day. Elon Musk demonstratively manipulated its worth when he announced that Tesla had bought $ 1.5 billion worth of Bitcoin.
It’s an easy game for anyone with billions tossing around. The manipulation by Musk, Peter Thiel’s former employee as a co-founder of PayPal, doesn’t worry Thiel. The question of whether China could use Bitcoin for nefarious purposes in an imaginary scenario worries him.
Thiel represents the new ruling elite of our civilization. It consists of individuals sitting between two hyper-real worlds, one of which is dominated by the mysticism of the means of payment (cash) and the control of financial flows, complemented by another who seeks political control and the hegemony that enforces the now imaginary “Civilization” is required. Rules for the flow of funds. Since the death of Bretton Woods, these rules have lost all meaning. That is, the rules themselves can be armed. It is a monopoly that Thiel, his colleagues at the Nixon Foundation, and most of the people in Washington insist on making reservations for the United States.
* *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial guidelines.